Basque Government, Triodos, Elkargi Present 1% Credit Line

Basque cinema surges but problems with central government film funding continue to bedevil the sector

Joxean Muñoz (third from left)
Copyright: Emilio Mayorga

SAN SEBASTIAN — The Basque government has activated a bank guarantee scheme for the cultural and creative industries channeled through a Basque guarantee specialist, San Sebastian-based Elkargi SGR, and supported by Triodos Bank, which offers low-interest, 1% credit lines.

The Basque government is also setting up training programs to groom producers about how to frame presentations in a way which is readily comprehensible to lenders.

Both film and TV companies can receive the new 1% facility, which was announced in May. So “Financing at the Service of the Audiovisual,” Friday’s final industry panel at the 64th San Sebastian Festival, which wraps Sept. 24, served more to explain the system’s mechanism. Conversation also turned to the wider context of film finance for Basque films in general. The Basque government has made large advances in recent years. Its production sector, as usual, wants more.

The new collaboration of Elkargi, a 36-year-old Basque Country-based bank guarantee company (Sociedad de Garantía Recíproca, SGR in Spanish), focused initial discussion.

Marco Pineda, Elkargi SGR general director, explained that its guarantee system had two main attractions: It worked on a longterm basis, it understood the value of intangible assets, such as movies.

Triodes specializes in financing social, cultural and environmental projects. “We aim not just to give the maximum returns to our shareholders but to introduce values into the world of finance,” said argued Mikel García-Prieto, Triodos director general. He added: “The big challenge isn’t to finance culture, it’s to make the economy more cultured.”

Friday’s round table has a far broader context, however.

“There is substantial increased awareness of how the creative industries as a whole are delivering strong, rapid economic growth and contributing to productivity gains,” Jonathan Olsberg, chairman of London-based creative industries strategy consultancy Olsberg-SPI, suggested at a first Toronto industry conference in early September.

The Basque government’s big priorities are employment, a economic safety net for the disadvantaged, and education. In such a context, cultural industries are highly important.

Despite the crisis, the Basque government maintained its direct subsidy support for Basque films, which is crucial, said Joxean Muñoz, the Basque government’s deputy culture minister.

The challenge now, to take the Basque industry to other level, is double-fold: Strengthening financing links with the private sector; support to increase Basque cinema’s international reach, including of Basque-language films, Muñoz added.

Many Spanish banks have steered clear of investment in film and TV, even the discounting movie pre-sale contacts to TV networks. Hence the need to start-kick bank guarantee schemes for the sector.

Basque films now snag international sales agents deals, imperative if they are to see to overseas markets: Two – eOne Seville Intl. on “Advantages of Travelling By Train,” and Filmax on “Operacion Concha” were announced during the Festival.

Its weakest flank may be Spanish film financing at a national level. The government has introduced new subsidy regs, focusing aid on arthouse crossover and mainstream movies with muscular sales and distribution contracts.

According to a European Audiovisual Observatory report, presented August at the Locarno Festival, “Public Financing for Film and Television Content,” over 2010-14, public funding in Spain averaged just below 100 million, vs, 900 million for France and over 300 million Germany. Ramon Colom, president of Spain’s Fapae oil producers assn. complained at a press conference in San Sebastian that annual central government finding managed by Spain’s ICAA film institute had plunged from 30 million to 20 million, with 10 million being retained by public authorities.

“The Audiovisual sector could be a driving force for change in this country; the only thing we need is a boost from the government,” Rafael Lambea, general director of Crea SGR, a Madrid-based bank guarantee company said at the San Sebastian panel.

John Hopewell and Emiliano de Pablos contributed to this article